The Thomson Reuters/University of Michigan preliminary index of consumer sentiment decreased to 83.9 in July from 84.1 the month prior, today’s report showed. The median forecast in a Bloomberg survey called for a gain to 84.7. The gauge reached an almost six-year high of 84.5 in May. The recent increases in mortgage rates and prices at the gas pump may have restrained consumers’ views on the economy in the next six months.

This result is supported by another indicator, the Gallup U.S. Economic Confidence Index.

Gallup: - ... U.S. Economic Confidence Index was -9 for the week ending July 7, on par with scores from the past month. The index has been slightly lower since reaching a five-year weekly high of -3 in late May and early June. Still, confidence has generally improved from levels Gallup has measured over the past five years.

The relatively lower levels of confidence in June and early July may be a result of more volatility in U.S. stock prices and a stubborn unemployment rate.

While consumer confidence remains near post-recession highs, the recent slowdown in improvements could become exacerbated by rising fuel costs in July.

2. Today we've seen the producer price index unexpectedly move up due to higher energy costs.

USA Today: - A big jump in gasoline prices pushed wholesale inflation up in June by the largest amount in nine months. But underlying inflation showed only a modest gain.

Wholesale prices rose 0.8% in June compared with May when prices had risen 0.5%, the Labor Department reported Friday. It was the biggest gain since a 1% jump in September and was driven by a 7.2% surge in gasoline prices.

Keep in mind they are talking about June gasoline prices in this report. Now take a look at the chart above and compare it to the levels for July. It doesn't bode well for the July headline PPI number, which could begin to eat into corporate margins.